Facebook Juices Its Mobile Ads

FB bets on new ad targeting strategy

Facebook (FB) has gotten lots of traction in the past year by selling install ads for mobile apps. But now the company is pushing the effort even further — with ads displayed after a user has made a download.

This new ad strategy could be another nice driver for revenues. Here’s some more detail: A company will put together a campaign on Facebook’s News Feed. If a user clicks an ad, he or she will go to Apple’s (AAPL) appstore or Google (GOOG) Play to download the app. So far this year, these ads have generated a whopping 145 million installs.

The problem? Well, once someone installs an app, the engagement is pretty tepid. About 66% of the users open the apps 10 or fewer times.

To deal with this, Facebook now allows ads that send a user directly to a part of the app. For example, an ad might flash a promotion for a cheap hotel rate, and a simple tap will direct the user to the bookings tab.

And yes, an app developer also has lots of flexibility for ad campaigns. Facebook allows targeting based on demographics, interests, and even mobile device type.

It’s a smart idea — app developers generally have a tough time keeping users coming back. In fact, given the high costs of user acquisition, churn can be a huge problem.

So with Facebook’s scale and its role as being a key source of app installs, providing after-install ads seems like a no-brainer — and it should have little problem adding millions more to its coffers.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

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